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The article makes clear that Tether is actually more like a Special Drawing Right (SDR) on overcollateralized derivatives of the crypto ecosystem. Which is to s
by unyttigfjelltol 4y ago
The article makes clear that Tether is actually more like a Special Drawing Right (SDR) on overcollateralized derivatives of the crypto ecosystem. Which is to say that Tether is more like a derivative of rainbows and unicorns-- actually it's basically the IMF of rainbows and unicorns.
Is Tether the equivalent of USD? No. It is not USD.
Why is Tether valued at 1 USD per coin? I'm not sure. But it almost certainly will not be if the value of crypto broadly falls enough to compromise Tether's collateral. The value of that "paper" is a nonlinear function. The "collapse" would happen so very slowly... and then all at once. Good luck.